Can You Help?

There has been debate on the RBI working group's suggestion of allowing corporate Houses in the banking sector. There has been opposition to this suggestion by many including ex RBI Governor and ex Deputy Governor. 

Their basic argument is Business Houses can divert depositors’ money to their businesses and it can create systemic risk including depositors losing their money. I have understood the basic logic but have the following questions.

1.       Why should this logic be applicable to The Corporates which have no borrowings and have perennial cash surpluses?.

2.     Which route is cheaper and more convenient for a business house to borrow excessively from a bank? 

• Float their own bank or
•  Bribe relevant officials of existing banks? 

(Clue : None of the willful defaulters owned a bank)

3.      Which has more downside for the business house for defaulting on a loan?

• Loan taken from any other bank or
• Loan taken from a bank where they have significant equity stake

4.     Why are SEBI and IRDA comfortable allowing MFs and Insurance Companies to be promoted by Business Houses, where the same logic can be applied? 

5.     Should PE investors be considered as large corporate houses for this purpose as they also have interest in other businesses companies?

I will be grateful if you can help me with answers.